Volatility and Economic Growth in the Twentieth Century

MERCEDES CAMPI; MARCO DUEÑAS

Lyon

Conferencia; 1st International Conference on Cliometrics and Complexity; 2016

Ecole Normale Supérieure de Lyon

The twentieth century was a period of outstanding world development together with an unequal income distribution. Countries in different regions of the world followed different patterns of economic growth: a few countries industrialized and converged to high levels of wealth, others were able to catch-up with rich economies, several followed unstable and unsustainable paths, and others had disappointing low performances in the long run. This paper analyses the international distribution of growth rates and its dynamics. Our main contribution is to show that the growth performances of world countries present a remarkable structural break around the mid-century. We observe that the stylized fact that low income economies have higher volatility is only significant for the second half of the century, after the structural break. Additionally, we study possible economic determinants of the volatility differentiation with respect to the countries' size. Our results contribute with more empirical facts that call the attention to traditional macroeconomic theories to explain better the underlying complexity of the growth process.